South Korea Crypto Market Shrinks by 60% in Past Six Months – Are Investors Preparing a Move?

Adoption Cryptocurrency South Korea

Author

Tim Alper

Author

Tim Alper

About Author

Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

Author Profile

Share

Copied

Last updated: 

June 26, 2023

Why Trust Cryptonews

Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews

The size of the South Korean crypto market has shrunk by a whopping 60% in the last six months as retail investors in the crypto-keen nation slash their crypto spending. But there is a suggestion that some traders in the nation are still dipping their toes in the market’s choppy waters, while others appear to be readying for more significant moves.

Hanguk Kyungjae reported that the South Korean crypto market cap is now worth $16.1 billion – down from close to $39 billion just half a year ago. The data was compiled by the regulatory Financial Services Commission (FSC).

Crypto-to-crypto transactions also dropped by a staggering 98%, suggesting a sharp drop in trading activity, with fiat-to-crypto/crypto-to-fiat transactions shrinking by 58%.

And while investors made some $1.2 trillion worth of “profits” from their crypto trading activities in the second half of 2021, that figure has shrunk back to under $450 million in the past six months.

‘Ant’ Investors Readying Market Move?

But while the data might appear to suggest that retail investors – known as “ants” in South Korean trading circles – have left the picture, it seems they are not yet ready to turn their backs on the market.

The FSC’s data, which pooled statistics from domestic exchanges, shows a sharp rise in the number of people opening bank account-liked crypto wallets in the past few months. Since the end of 2021, this figure has risen by 24% – with some 7 million such accounts now in existence. This could mean that some people are looking for an opportune moment to take the crypto plunge.

And exchange price comparisons appear to show that the kimchi premium is still alive and well, even if it, too, has reduced in size. Cryprice data at around UTC 11:10 am shows that prices on South Korean platforms such as Upbit and Bithumb remain around 0.2-0.3% higher than those on international exchanges such as Binance.

During previous market crunches, “ant” investors chose to exit the market – leading to the rise of a “kimchi bonus.”

The regulator added that the majority of exchange users were aged 30-39 and male.